Humphrey Percy Chairman and FounderWed 17 May 2023
IMF and Bank of England
Readers will recall the poor report card that the International Monetary Fund gave the UK in March. The latest set of forecasts from the Bank of England set it at odds with the IMF: firstly no recession, instead modest +0.25% growth this year and +0.75% in the next two years. Inflation getting back at or close to 2% target in 2024. Interest rates peaking at 4.75% in Q4 this year. Rather a different picture to the picture painted by the IMF. Obviously we all hope that the BoE is right not least on the grounds of proving the (interfering) IMF wrong, but the lack of ongoing robust UK productivity should not be overlooked. Whatever the economic outcome may be in the next three years, the UK needs to work harder.
US Debt Ceiling
Yesterday’s talks between President Biden and House Speaker Kevin McCarthy ended without agreement but positively they both agreed that there could be an agreement. Finally the President is engaged on this topic and has cancelled his visit to Asia due to take place this week. Markets are on hold awaiting a solution to this threat overhanging the US economy. Meanwhile Gold is at $1991 and WTI Oil at $70.89.
World Trade and Tourism Council
WTCC statistics are not normal reading for us but these figures are eye catching: tourist annual spend by city in USD billions: Dubai 29; London 16; Doha 16; NYC 12; Paris 9. It just shows what a success Dubai has made of itself as a trading and commercial hub in just 20 years with its first-class hotels, shopping malls and infrastructure.
In the USA a dozen Midwest large eggs cost USD 5.46 just six months ago, but now have fallen more than 80% to cost just $0.94. Midwest is the benchmark for eggs sold in their shells as opposed to powdered or hardboiled. Avian flu was responsible for the spike in egg prices together with higher feed and energy costs. Interestingly consumers stopped buying eggs when they reached those dizzy heights and have not (yet) returned to buying eggs further compressing the prices. Eggsellent.
Captain Fantastic and the Brown Dirt Cowboy
For those who believe Elton John to be a recent phenomenon as well as of course an all-round national treasure, be respectful for him selling 1 million copies of this album on this day in 1975 the day of its release.
Here is the memorable Someone Saved My Life Tonight:
When I think of those east end lights Muggy nights the curtains drawn In the little room downstairs Prima donna Lord you really should have been there Sittin’ like a princess perched in her electric chair And it’s one more beer and I don’t hear you anymore We’ve all gone crazy lately My friend’s out there rolling ’round the basement floor (Ooh-ooh-ooh-ooh-ooh…)
And someone saved my life tonight Sugar bear (sugar bear…)
You almost had your hooks in me Didn’t you dear You nearly had me roped and tied Altar bound hypnotized sweet freedom Whispered in my ear You’re a butterfly And butterflies are free to fly Fly away High away Bye bye (Ooh-ooh-ooh-ooh-ooh…)
Never realized the passing hours of evening showers Slip noose hanging in my darkest dreams I’m strangled by your haunted social scene Just a pawn outplayed by a dominating queen It’s four o’clock in the morning Damn it listen to me good I’m sleeping with myself tonight Saved in time Thank God my music is still alive (Aah-aah-aah-aah-aah…)
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Japan Some of the market’s Great Minds spent yesterday afternoon debating whether Japan could get away with raising interest rates at the same time as the Central Banks from the other major markets are starting to cut their interest rates. In short, Japan can and probably will, since its monetary policy has been effectively in […]
I’m a central banker, get me out of here Ant and Dec were not present at the RBA decision overnight. However, based upon the reception of the decision, Governor Michele Bullock might rightly feel she was in one of the duo’s trials. Markets offered a frosty reception to the Reserve Bank of Australia’s latest interest […]
UK With 2 year mortgage rates less than 4% and 5 years at 4.39%, the implication for the housing market which has responded by a modest 0.2% rise, is that rates are soon going to fall and that the UK economy is stabilising. While there will doubtless be setbacks to this rose tinted scenario, for […]